Baker "working the edges" of budget to address shortfall

BOSTON -- Faced with a $220 million revenue gap with three months left in the fiscal year 2017 budget he has already had to cut, Gov. Charlie Baker said Thursday he thinks his team can manage the latest shortfall without making additional cuts to state programs and services.

March tax collections missed the administration's target by $81 million, opening a $220 million hole in the budget for fiscal year 2017, which ends June 30. Administration and Finance Secretary Kristen Lepore suggested last month that March revenue collections could determine whether another round of midyear budget cuts would be necessary, but Baker said Thursday he thinks his team can balance the budget without using his so-called 9C authority.

"I would call that a last resort," he said when asked about additional unilateral cuts. "We managed to get through a $450 million shortfall the last three months of last fiscal year without resorting to 9Cs and, yeah, we would prefer to come up with other ways to find our way to balance."

Asked Thursday what other tools his administration is considering using to balance the budget, Baker said a lot of the effort is "nipping and tucking."

"You can find lots of places in a budget with $40 billion worth of spending where either a program got started late or something didn't go quite the way it was supposed to or something turned out to cost less than it was supposed to," he said.

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"But we're going to have to, obviously, spend a lot of time working the edges of a lot of this stuff, but I would prefer not to do 9Cs."

The governor did not describe any specific areas where he's examining budget fixes. A near-term surge in tax collections would help address the situation.

While Baker has often minimized the difficulty of trimming the budget, the revenue shortfalls have been significant, when considered in context.

The current $220 million revenue gap represents about 0.56 percent of the total $39.25 billion budget, but is more than twice as large as the $91.4 million increase Baker proposed in his fiscal year 2018 budget for Chapter 70 local school aid in the fiscal 2017 budget and is $7 million less than the amount by which his administration has increased Chapter 70 aid across his first two years in office.

It is also more than twice as much as the $95,621,815 allocated in the current budget for the Massachusetts State Scholarship Program, which provides financial assistance to Massachusetts higher education students. And $220 million is just a shade more than the $218.7 million allocated in the budget for state-operated, community-based, residential services for adults.

In October, Baker opted against a major pruning of spending and his budget team took other actions to address what was then a $300 million budget gap.

But in December, Baker cut $98 million in spending from the $39.25 billion budget. In total, 140 programs and accounts in the budget were reduced, with funding slashed for health care, the State Police, municipal regionalization, parks and recreation, senior care and funding eliminated entirely for a postpartum depression pilot program, a Down Syndrome clinic and a suicide prevention account.

In making the December cuts, the governor said he was concerned that the budget passed last summer by the Legislature failed to adequately fund some major spending needs, including court-ordered attorneys, snow and ice removal, and emergency shelter assistance.

After calling Baker's cuts "premature" and pledging last year to restore at least some of what the governor cut, legislative leaders last month acknowledged that the Legislature likely would not be able to restore funding for favored programs given the slow growth in tax collections.

As they waited for the revenue picture to brighten early this year, legislative leadership pushed through a package of pay raises for lawmakers, judges and constitutional officers that has been estimated to cost $6.5 million this year, and $18 million next fiscal year.

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